Television digest with electronic reports (Jan-Dec 1959)

5 — Congress ANTI-PAY-TV LOBBY: Television makes strange bedfellows. Movie exhibitors, who blame home screens for their falling box office receipts held a strategy conference in Washington this week, and decided to fill a $100,000 war chest to fight the enemy — pay TV. The exhibitors’ Joint Committee on Toll TV, meeting with the Theatre Owners of America, voted to ask all theater operators to kick in to the $100,000 fund for “a completely united front” in support of a legal, engineering & public relations campaign against toll TV in all its forms. As a starter in the drive, headed by JCTT chairman Phil Hailing, many of the 60 exhibitors at the session paired off for reconnoitering on Capitol Hill to lobby for the anti-pay-TV proposals (Vol. 15:9) by House Commerce Committee Chairman Harris (D-Ark.). His bill (H. J. Res. 130) probably will go to hearings in April following the Easter recess of Congress. The movie-house delegations claimed to have made contact with % of the House and % of the Senate, finding anti-pay-TV sentiment running strong. Conspicuously absent fi’om the JCTT sessions was former co-chairman Trueman Rembusch, Indiana Allied States circuit chief who is on the outs with the rest of the committee. Rembusch wants the pay-TV opposition directed only at broadcast systems, not to wired systems which also are covered by the Harris resolution. But he has incited no revolt by other theatre owners, say JCTT sources. The TOA, which once tried to raise a $10,000,000 antiTV trust fund to buy up post-1948 movies to keep them off the air (Vol. 14:21), left collection of the new $100,000 pro-free-TV kitty pretty much to the JCTT. The trust fund idea meanwhile has been taken over by the new American Congress of Exhibitors. Back on the Hill, another bill (HR-5254) “to prohibit the charging of a fee to view telecasts in private homes” was introduced by Rep. Morrison (D-La.). I Hiqh Cost of Probes: Chairman Magnuson (D-Wash.) of I the Senate Commerce Committee presented an advance I $515,000 bill this week for TV-radio & other investigations i this year — and ran into a floor hassle over the soaring 1 cost of Congressional probes. He got his full appropriaI tions, including $290,000 for a special transportation study, i but not before Sen. Ellender (D-La.) protested that Senate investigations in 1959 are costing more than $4,000,000 vs. $140,000 for all probes in 1940. “I am just wondering about the necessity for it all,” said Ellender. Magnuson gave no timetable for his inquiries, but said they’d run all the way from pay TV, boosters and vhf-uhf to international radio frequencies. Meanwhile, Sen. Carroll (D-Colo.), whose special Judiciary subcommittee on administrative practices & procedures already had been given $115,000 to study the FCC & other agencies (Vol. 15:7), picked his chief counsel. Colo. District Court Judge Joseph P. McDonald will head Carroll’s staff for as-yet unscheduled hearings. McDonald was in headlines in 1955 when he presided at the trial of John Gilbert Graham for killing his mother & 43 others by planting a bomb in an airliner. KSLM-TV (Ch. 3) Salem, Ore., was denied more time to build as FCC finalized an initial decision recommending the denial (Vol. 14:13). The FCC More about OPTION TIME PROS & CONS: The Justice Dept.’s opinion as to the legality of option time (see p. 1) takes apart FCC’s findings on the subject, item by item, and says that there’s just no alternative to declaring the practice illegal. Justice’s concluding paragraphs of its 14-page opinion just about wrap it up: “Viewed either as an ‘exclusive dealing’ or ‘tying’ device, the Commission’s own findings require the conclusion that option time runs afoul of the Sherman Act. Beside the point, therefore, is affiliates’ limited right to reject network programs, as well as the view of a narrow Commission majority that option time ‘is reasonably necessary for successful network operations and is in the public interest.’ For, as in the Paramount [case] so here, the right to reject a limited share of tied copyrights cannot avoid illegality . . . Similarly rejected must be the ‘earnest argument that’ removal of option-time provisions ‘will be very disadvantageous to [networks] and will greatly impair [their] ability to operate profitably’ ; for ‘the policy of the anti-trust laws is not qualified or conditioned by the convenience of those whose conduct is regulated. Nor can a vested interest in a practice which contravenes the policy of the anti-trust laws receive judicial sanction’ : “Such considerations apply with particular force here. For, as the Supreme Court long ago observed, and once again reiterated only within the week, the Communications Act recognized that the field of broadcasting is one of free competition. The sections dealing with broadcasting demonstrate that Congress has not, in its regulatory scheme, abandoned the principle of free competition as it has done in other areas.” FCC’s findings were contained in a 40-page document ending with 18 “ultimate findings.” Among the more important effects of option time found are these: (1) It requires affiliates to carry some programs they otherwise might not. (2) It has no “significant” effect on inter-network competition. (3) It limits access to prime station time on the part of program producers, reps, non-network advertisers. (4) It has helped non-network organizations because it has built attractive spot adjacencies. (5) Principal problem is station scarcity. (6) It’s necessary to guarantee national advertisers a national audience. (7) It enables networks to place firm orders and to eliminate uncertainties in programming & sales. (8) It’s necessai’y to avoid gradual erosion of station time clearances. (9) “The loss of advertiser business that would result . . . would be a double injury to the networks, since they would have to continue to program the time periods; with the slim margin of network profits, the loss of a few time periods could place network business in the red.” (10) It’s necessary to “maintain network programming, including news & public affairs programs, at present levels.” (11) “It would be difficult to preserve the simultaneity of live programming which is the essence of the network’s TV service, or to schedule pi’ograms in the relationship to each other that networks and their advertisers desire for maximum audience appeal.” Dissenter Hyde opined that networks could get necessary clearances without option time. Furthermore, he said: “if the Commission is to sanction the protection of networking because it considers the protection provided by